Making Globalization Work for Your Company
Today’s CR as a business strategy includes integrated development, philanthropy abroad
Globalization ‘ the growing integration of economies and societies around the world ‘ has been one of the most hotly debated topics in international economics over the past decade. Rapid economic growth and poverty reduction in China, India and other countries that were poor just 20 years ago has been a positive aspect of globalization. Many of these emerging countries’such as China, India, Hungary and Mexico’have adopted domestic policies and institutions that enable their people to take advantage of global markets, which have sharply increased the share of trade in their GDP.
But not all countries have integrated successfully into the global economy. Some two billion people ‘ particularly in sub-Saharan Africa, the Middle East and the former Soviet Union ‘ are being left behind. These countries have been unable to knit into the world economy; generally, these economies have contracted, poverty has expanded and education levels have risen less rapidly than in the more globalized countries. So while globalization often has been a very powerful force for poverty reduction, too many countries and their people have been left out.
The assumption that often arises as a result is that globalization’which is often blamed on multinational corporations particularly in the U.S.’has increased inequality and environmental degradation in many of the poorest areas of the world. Now, companies once held accountable only for the direct, contractually specified or regulated consequences of their actions now find themselves responsible for alleviating hunger, disease and more: issues as disparate as environmental sustainability, the spread of disease and treatable illnesses, and child labor in sub-Sahara Africa. Thus it is easy to see that our increasingly interconnected world demands strong corporate leadership to strengthen governance, harness economic potential, alleviate global poverty and improve human conditions.
While some companies have made major strides in addressing important globalization and development challenges, overall, these achievements do not stack up against the scale of change needed for real progress. What should be the role of business’ What is the responsibility of corporations to address poverty and underdevelopment, to help disadvantaged communities where they conduct their business, manufacture their products, and employ workers’
Businesses are engines of growth and sustainable development with the potential to impact developing countries enormously. They can help improve people’s lives through innovation, investment and creation of decent jobs and development of affordable products and services’especially those that meet basic needs such as water, energy, nutrition, healthcare, housing and education’while leveraging their core business expertise and realizing commercial success.
Many business leaders lack the knowledge and information to do more than simple grant making and traditional philanthropy. However, companies that want to continue to be in business must grasp increasingly competing societal realities and realign their strategies to include the needs and desires of populations in developing countries and under-served segments of all societies, including in their home markets, helping those populations become able customers. I’ll talk about how several multinational corporations are doing just that’working towards good for people around the world while also making advantageous business decisions’in my next post.